Pre-market update (updated 7:30am eastern):

  • European markets are trading -0.8% lower. 
  • Asian markets traded -0.8% lower. 
  • US futures are trading moderately lower.  

Economic reports due out (all times are eastern): Import and Export Prices (8:30am), Treasury Budget (2pm)

Technical Outlook (SPX):

  • Despite opening lower, SPX managed to finish higher for a fifth straight day, the first time that has occurred since 3/7-3/12. 
  • However, the gains that are being made are sluggish at best, and without much fanfare. 
  • Volume continues to drop unbelievably lower on SPX. 
  • Setting up for a pullback at the very least heading into next week as buyers seem to be lacking conviction at these levels. 
  • Market remains well overbought on multiple time frames. 
  • For a while, the rally off of the 6/4 lows looked more like a bear-flag forming, but no longer with the strength in the market over the last month. 
  • If the SPX is to finish again in the green today, it would be the first 6-day rally since the 12/7/10 – 12/14/10 – to say the least it hasn’t happened in a while. 
  • SPX poised to make a move to 1422 and challenge the year’s highs. 
  • Biggest news so far this week, technically, has been the SPX breaking out of the descending trend-line off of the 4/2 highs (as noted below). 
  • It’s not uncommon to see large market rallies going into an incumbent re-election.
  • 30-min chart has us primarily trading in a sideways channel. 
  • If you look at the 4 previous higher-highs in the market since the 6/4 bottom, then one could conclude that we’ve reached another temporary top, and are prime for another pullback. 
  • One area of concern is the 3 large gaps off of the 6/4 lows that remain unfilled, including 6/6, 7/26, 8/3
  • At this point, uptrend support rests at 1354.
  • SPX trading above all significant moving averages (10,20,50,200).
  • VIX remains under 16.
  • If another sell-off were to ensue, watch for a break and close below 1354 for a new lower-low in the market.  
  • Downside reversal signal still remains intact on the SharePlanner Reversal Indicator

My Opinions & Trades:

  • Went short HE yesterday at $28.44.
  • Day-traded AHS yesterday and sold at $6.45 from 6.46 for a $0.01 loss. 
  • Bought OSK at $23.74. 
  • Going to consider any sell-off as opportunities to buy stocks on the cheap. Dip buying should be the norm until a lower-low is put in place.
  • Remain long RHT at $56.19, AIG at $32.46, MDT at 38.15 and AMZN at $233.90. Short BRO at $25.65


SP Market Analysis 8-10-12